**Variable Ratio Write**

An option strategy in which the investor owns 100 shares of the underlying security and writes two call options against it, each option having a different striking price.

**Vega**

A measure of the rate of change in an option’s theoretical value for a one-unit change in the volatility assumption.

**Vertical Spread**

(1) Most commonly used to describe the purchase of one option and sale of another where both are of the same type and same expiration, but have different strike prices. (2) It is also used to describe a delta-neutral spread in which more options are sold than are purchased.

**Volatility**

A measure of the fluctuation in the market price of the underlying security. Mathematically, volatility is the annualized standard deviation of returns.